Investments and creating wealth

Key topic

Bad investment decisions contribute greatly to the financial problems of professional athletes.  Athletes have been and are, an easy target for many shady financial predators, who promise them ‘sweet deals’ with huge returns in a short period of time.  With so many ‘get rich quick’ schemes out there which try to sell the improbable dream, athletes need to have the knowledge which will help them make educated decisions for themselves, and control their emotional responses to risks and the market. In this lesson we go through the process of getting prepared to invest and we pinpoint what to look for and what the risks are.  We also look into the importance of investment diversification and we go over real estate and other types of investing.  Towards the end of the lesson, we will present the ‘Being Investment Prepared’ Checklist which will help athletes understand whether they are investment ready or not!

Learning objectives

• The main reason why people invest is to see a return on their investment.
• In preparing to invest, athletes should devise a consistent plan, control their emotional responses to risk and the market, and always strive to see the big picture.
• Every investment carries a certain amount of risk and reward. Risk can be managed only up to a certain extent and it cannot be eliminated.
• Creating the right team of trustworthy, reputable, and established professionals is important to the athlete’s financial success.
• There are various investment options available which are suitable in different situations, depending on your long-term financial strategy and they include stocks, bonds, real estate, etc.
• Understand what diversification is and appreciate its importance when investing.
• Before investing make sure you are investment prepared. An investment preparation checklist gives you an indication as to whether you are ready to start investing.

Introduction

Investing is one of the key ways to achieve the financial goals you have set in your financial and life plan.  Through investing you can make your money work for you and take charge of your financial security by growing your wealth and generating additional income streams to support your desired lifestyle.

Investing means committing capital or funds to different types of assets with the expectation that you will generate a gain or profit in the future from these investments.  An investment is different from saving because an investment is a rather active way of using your money while saving is basically storing your money for future use.  Investing always carries risk with it therefore it is critical to do your research and analyze the risk before committing your money into an investment.

Every one of us, athletes or not, need to be educated in the basics of investing.  Such knowledge will help us create successful investment strategies and plans, through which we can generate enough income to support the lifestyle we envision in our life.  Knowledge forms the foundation of any successful investment strategy.  Knowledge can give us the tools to invest wisely and make our money work for us.

The reason many people invest is to achieve financial freedom. The term “financial freedom” means something different to each person.  Many define it as being able to have the lifestyle they want and knowing they can afford it financially, without worrying about paying bills and making ends meet. Financial freedom means that instead of having to work to generate income, you will have your assets working for you and these assets will be generating the income you need to support your desired lifestyle.  In order to attain this goal, it’s important to begin investing as early as possible so that you generate passive income streams instead of having to work for every penny.

In addition to having your money work for you, there is more to be gained through investing:

• You can protect your money against the possibility of negative interest rates which can decrease instead of increase the balance of your precious saving accounts.
• Investing helps you keep pace with inflation, by growing your money fast enough to keep up with rising prices.
• If you decide to invest money in a new or current business, you support the creation of new jobs and new products. In addition to enjoying the process of creating and establishing a new business, you can also get a good return on your investment.
• Investing can help you reduce your taxable income. There are certain investments such as retirement funds which are exempt from taxation.

Whatever goals you may have set in your financial freedom plan, whether travelling the world or retiring on a yacht in the Greek Islands, investing is the key to getting you where you want to be.

Athletes and investment basics

The reward for athletes who reach a top level in their sport, does not only come in the form of public recognition and a display case full of medals. Most professional athletes are privileged with earning what an average person earns in a lifetime, in just a few years. Many will squander this money away in a short time, but others will make the right decisions, including investments, that will allow them to retain their financial freedom and security after their retirement.

The core concept of investing, is putting your money to work for you by buying assets that you believe will go up in value, such as stocks, precious metals, real estate and others, and use the income generated from them to support the lifestyle you want to follow. The catch is that these assets do not always increase in value, so there is a risk of losing some or all of the money you have invested.

And while high-earning athletes might have an abundance of capital available for investing in comparison to their lower-paid colleagues, that doesn’t mean they don’t have to take the same important steps to become prepared to dive into investments.

Everyone, no matter their financial status, should have a financial plan in place that at least includes a budget and a savings plan. After building up an emergency savings fund that can cover your basic expenses up to one year, in case your income sources dry up, you can start putting aside risk capital. Risk capital is money that you can afford to lose without putting yourself in dangerous financial circumstances. If you already have debts, your focus should be to pay them off before starting to invest.

As an athlete you should already have a team of trusted advisors around you, people who have contributed to your success, such as your agent or a legal advisor. Before investing, you should consider adding a financial advisor to your team, if you don’t already have one. A financial advisor can advise you on how your emotions can lead to bad investment decisions or how a consistent plan will almost always beat a get rich quick scheme and can also protect you against various fraudulent investment schemes.

Building an overall investment plan with the help of your team doesn’t mean you don’t need to gain the required knowledge to make educated financial decisions for yourself and be able to conduct some basic due diligence research on every investment you’re considering.

Understanding the concept of risk is crucial for investing. Basically, each type of investment comes with a different level of risk and reward; the greater the risk you take of losing your money, the higher the potential return, and ideally, you want to earn the highest return with the least amount of risk.

The key to managing risk, which can’t be totally eliminated, is diversifying your investments with the help of your financial advisor by spreading your money into several different types of investments that are unlikely to all move in the same direction; when the value of one goes down, one of the others might go up, so you either have better returns or reduce your overall losses.

No matter how “safe” you believe an investment is, you always need to have an exit plan, in case the investment doesn’t perform as expected. Knowing the liquidity level of your assets beforehand will help you determine how your exit plan works.

Investing makes sense and it’s all about putting your money to work for you, instead of you working for money. The sooner you start investing in life, the sooner you will be able to taste the fruits of your investments. But in order for any investment plan to be successful, it needs to be aligned with your lifestyle goals and to match your risk tolerance.

Action Steps – Exercise 1 (10 minutes)

Ask athletes to complete the “Net Worth Chart” below to figure out how much they are worth and where they are in terms of investing.

Basic investment definitions and concepts

Investing is buying assets that you believe will go up in value. Assets do not always increase in value, so every time you invest, you risk losing some or all of your money. Before stepping into the world of investments there are some basic definitions that will help you better understand how investments work.

Risk capital refers to money that you can afford to lose without putting you in dire financial circumstances.

As we have already discussed, there are two types of income. Active income is earned through work, while Passive income is earned without your work effort, like income from renting out properties or from interest on your savings. Portfolio income is a type of passive income and it represents the returns from investing in the financial market.

Prices change according to the Law of Supply and Demand. Demand reflects how much quantity of a product or service is desired by buyers at a certain price. Supply is how much quantity of a certain good producers are willing to supply at a certain price. The more people want a product, the supply price of that product goes up. When fewer people want that product, prices go down. The reason behind that is that resources are finite and therefore once demand gets too high, prices must adjust to reestablish balance.

Return on investment (ROI) is a performance measure that helps investors compare the return offered by one investment to returns on other investments and is expressed as a percentage or ratio.  It measures the gain or loss generated on an investment, relative to the amount of money invested.  For example, if you have invested $100 and in a year’s time you receive a dividend of $10, then your return on investment is 10%.

The standard formula is: [ROI= PROFIT/ INVESTMENT]

Interest rate is the amount charged, by a lender to a borrower for the use of assets and it is usually expressed as a percentage of the principal amount. Interest rates are typically charged/credited on an annual basis, known as the annual percentage rate (APR). Anyone can lend money and charge interest, but it’s usually banks which are safe to do that because they are government regulated. They use the deposits from savings or checking accounts to fund loans and they pay interest rates to encourage people to make deposits.

As discussed previously, banks charge borrowers a little higher interest rate than they pay depositors so they can profit. At the same time, banks compete with each other for both depositors and borrowers. The resulting competition keeps interest rates from all banks within a narrow range of each other.

Compounding interest is the process by which the value of an investment increases exponentially because it earns interest both on the principal and on the prior interest payments. The beauty of compounding interest is that you make money both on the money you deposit and on the interest your investments pay you. Using this principle if you started investing just $100 a month when you were 18 years old you could become a millionaire by retirement age.

The Rule of 72 says that if you divide 72 by the non-decimal interest rate (10, not 0.1) you are receiving from an investment, the answer tells you how many years it will take for that money to double. This principle helps illustrate that the earlier you start saving for retirement, the better the chances that your money will double. If for example you have $10,000 in savings and are earning a 10% interest rate, your money will double in 7.2 years. (72 /10 = 7.2).

Preparing to invest

Investing makes sense. It’s all about making your money work for you, instead of the other way around! Best of all, the sooner you begin investing, the more you can increase your original investment.  In addition to learning basic investment concepts and definitions when preparing to invest, you have to also become mentally ready for investing.

Be consistent – The first step to achieving financial success is following a consistent, long-term investment plan. A regular savings plan can be the foundation of your investing career as it provides you with money to invest on a regular basis.  Financial success takes time, so you need to take the long view, and not focus on short- term gain.  If you start investing early and consistently, you will be able to take advantage of the power of compounding interest.

Have your emotions in check – Emotions make us do things we wouldn’t normally do. This is especially true with investing. The negative emotions most likely to affect people when they invest are greed and fear. Many people just concentrate on getting more and more money, but when they start to lose money, they become scared and freeze up.  Another mistake people make is getting emotionally attached with a stock, or a company, or a piece of real estate. Despite warning signs telling them to sell, they foolishly continue to hold on to it, even as it depreciates in value!  If you carry emotional baggage, you are more likely to make bad decisions than people who have a clear, relaxed business focus.  You should be aware that controlling your emotional responses to risk is an important part of your investment plan.

Look at the bigger picture – You should not just focus on the ups and downs of each individual investment; always step back and look at the big picture.  One of the biggest things to watch is trends. A trend is the direction towards which a market tends to move. By looking at trends and building your knowledge of trends, you will be able to assess the quality of the investment options presented to you.  To invest in companies or markets, you need to know whether they have any problems. General research can help you find out if there are problems and you will get a better understanding of why this stock is tumbling, or that housing market is rising.  Since the final decision will always be made by you when investing, you need to keep an open perspective and keep educating yourself on the surrounding facts of the investment markets.

Now let’s look at some tips on how to go about investing, from NFL running back Arian Foster.

Investment advice by NFL running back Arian Foster: Start with the end in mind Look at each contract like it is the last one you will ever sign, because you never know when your run in sports, will be over. Invest in companies that align with your beliefs Every investment is rooted in my personal conquest to help people live better lives. You can do good by doing good. Invest in great human spirits The world is full of great ideas, the execution is where the brilliance is and that takes a great leader and a great team. Be part of companies where you can learn too If you can make sure that with each company you work with, you can get your hands dirty and learn the business, that wisdom alone will always be a great rate of return on your investment. Know who to trust… and trust them Find mentors, you can’t go it alone, surround yourself with people you trust who are experts in areas you are weak in . . . and then, listen to them when they give you advice.

Acton Steps – Exercise 2 (10 minutes)

Tell athletes that they each have $100,000 available to invest.  Ask them how they would invest their $100,000 and why.  Take 4 to 5 answers and continue with a discussion in connection with the athletes’ responses.

Be careful of fraudulent investment schemes

During your lifetime you will come across people offering you “Get-rich-quick” schemes as well as people giving you a “hot” stock tip or urging you to invest in a sweet deal. These people are trying to affect your emotions by selling you an unlikely dream. Some examples of fraudulent investment schemes are Ponzi schemes, with the Madoff case being a good example of such a scheme, bank frauds, and accounting frauds such as the Enron collapse. By gaining the necessary knowledge of how these fraudulent schemes have worked in the past, you will be able to make educated financial decisions for yourself.

It is OK to listen to other people’s investment ideas, but never go through with one before doing your research and discussing it with a trusted advisor.  A clever way to filter the people who approach you with an investment idea, is to ask them to send you relevant information like an investment fact sheet or a business plan.  The more information you have, the more educated decisions you will be able to make.

In the past couple of decades, we have had several fraudulent investment schemes in which a lot of money was invested and lost.  Unfortunately, these investment schemes come in a lot of varieties and flavors, so we have to be extra careful.  Having knowledge about these fraudulent investment schemes of the past, may help you in identifying similar characteristics in any investment proposals you may get in the future.

A Ponzi scheme is an investment fraud where people invest and their return on the investment is paid from the money of new investors. So basically, a Ponzi scheme is a type of fraud in which belief in the success of a non-existent enterprise is fueled by the payment of (typically) quick returns to the first investors from money poured in by later investors. So, people who invested in 2012 were paid their return using the investment money from people who invested in 2013.  Therefore, you need to beware of the promise of unrealistically high returns. For example, person A invests $1million and is promised $100,000 in a year. Then person B invests $500,000 and the fraudster uses person B’s money to pay person A their $100,000. Person A seeing the huge returns gets excited and may even end up investing more money.

Another case of fraud, involved Enron, a U.S. energy trading company, that went on to carry out one of the biggest accounting frauds in history. Enron’s management utilized accounting practices that distorted the company’s revenues, which, at the height of this fraud, turned the company into the seventh largest firm in the United States. However, once the fraud was uncovered, the company collapsed and filed for chapter 11 bankruptcy in early December 2011.

With the help of either a financial advisor or a trusted person with investments knowledge, always check out the history of companies that you intend to invest in.  Do not look at companies just from the outset.  It is important to understand the value of the underlying assets of a company.  For example, if you invest in a company that owns and rents out a real estate complex, you need to understand what gives this complex its value.  Is it its location?  Is it its architecture? Or, is it just that currently real estate prices are overestimated?

Real Life Example (5-minute discussion) Peggy Fulford was convicted in prison for 10 years after defrauding multiple juggernauts of the sports world. She would befriend athletes, slowly earn their trust and then offer her services as a financial specialist with a Harvard Law degree. She was basically telling these athletes that she would collect their income, give them an allowance and then save and invest the rest of the money. Her strong suit was playing with the weaknesses of these athletes and making everything possible to earn their undying loyalty. She was so successful at it that these athletes had never bothered to check if the accounts she had allegedly opened for them even existed; they didn’t. It is also alleged that Dennis Rodman upon hearing the scam of his trusted friend and advisor was so shocked that he did not believe the FBI until he was shown bulletproof evidence. What does this case teach us?

Action Steps – Exercise 3 (5 Minutes):

Ask the athletes if they are aware of any fraudulent investment schemes of the past.  Discuss in class.

Risk and potential- The relationship of risk and earning capacity

An investment’s potential to generate revenue is usually directly correlated with risk.  Risk is the chance that an investment you make will lose money. There are ways you can manage risk, but a certain amount of risk will remain present in every financial decision you make.  There are different kinds of investment risks.  Common investment risks include:

Inflation risk – When the value of an asset or income decreases due to the reduced value of the currency.  Inflation causes the purchasing power of the investment return to decline.

Liquidity risk – This risk is commonly associated with real estate and refers to the inability to convert an asset to cash. With stocks that have a high trading volume, typically your liquidity risk is low except for when there is a significant market correction.

Interest rate risk – When interest rates rise, the value of a fixed-rate investment will decline in value.

Business risk – The potential for a company in which you have invested (in a stock or bond) to go out of business, become bankrupt, or be unable to pay back their bond obligations.

Opportunity risk (cost) – When you are presented with a better investment option than the one to which you have committed your money, it is called opportunity risk. Because you are already tied up in a project, you cannot act on a new opportunity and you potentially lose profits.

Credit risk – Credit risk is a specific risk for bondholders where the bond issuer cannot make interest or principal payments.

Market risk or Systematic Risk – The uncertainty and movement of financial markets is called market risk. This type of risk affects all securities in the same asset class in a similar manner. Changes in interest rates, tax base, and other factors, all affect the potential return on investment. Some events that can increase market risk include: natural disasters, major policy changes, and events that can impact the overall market, like the COVID 19 pandemic has affected the markets worldwide.

Idiosyncratic risk – The risk that an individual investment holds by itself (e.g. the risk of holding a single stock of a company).  This type of risk can be eliminated by diversifying your investments.  The more diversified your investments are, the closer the idiosyncratic risk goes to zero.

Reinvestment risk – This risk mainly applies to those bondholders whose bonds are coming due and who are seeking a bond investment with equal or greater interest and with the same amount of risk. If they are unsuccessful, their income can be reduced or they may have to invest in riskier bonds.

Political risk – Government action that might change the value of the investment is a risk that must be considered.

Before you start investing, it is critical to understand the relationship between risk and return. There are different types of investments, each associated with a level of risk and return. Risk is the chance that the return from an investment will be different than the one expected. Low risk is usually associated with low potential returns while high risk is associated with high potential returns. You can choose the level of risk you feel comfortable with which will come with a comparatively similar return on investment.

Risk and return have a correlative relationship, or at least they should if you are getting a good deal. If you are investing in something that carries a low level of risk, then you probably cannot expect to earn very high returns.  The opposite is true of high-risk ventures. In that case you would expect higher returns in exchange for risking your money.

For instance, if you invest your money in a brand-new company that has no proven track record, that investment is high-risk. The company could easily go out of business, and you would lose everything. On the other hand, it could be highly successful, in which case you would make a lot of money.

There are a lot of different investments out there, so when presented with different investment opportunities you should make a list of possibilities and evaluate the advantages and disadvantages of each one, together with a financial advisor or knowledgeable person you trust. Weed out any investments with overwhelming “cons,” and zero in on the best investments for your budget and goals.

Real Life Examples (5-minute discussion) At one point Boris Becker had it all. A former number 1, with numerous grand slams and tens of millions of dollars, but his fiery and unconventional personality shined through both on and off the field.  His extramarital affair ended up costing him $25m, his luxury condo in Miami and custody his sons and an additional $1.2m to the mother of his illegitimate daughter.  He lost his money in a string of misguided business ventures, including a sports website, an organic-food business and a planned 19-storey high-rise in Dubai called the Boris Becker Business Tower; a project which went bust in 2011. Perhaps the final nail in the coffin was his decision to invest a large chunk of his fortune in Nigeria’s oil and gas industry.

Action Steps Exercise 4 (10 minutes)

Ask athletes to discuss any examples they know which demonstrate the relationship of risk and earning capacity; for example, if they know of any startups which ended up giving a high return to their investors or which have gone bust and their investors lost all their money.  Have a discussion on the given examples with the whole class.

Your investment advisor

Your investment advisor plays a vital role in the success of your investment plans.  You need to exercise great care when choosing your investment advisor since this is the person who will be guiding you on how to achieve the financial results you need to attain financial freedom.

The best advice that we can give you, is to educate yourself on basic financial and investment concepts so that you are in a position to evaluate the advice given to you and make financially sound decisions. We reiterate that, basic financial knowledge can really save the day when it comes to financial decisions with a lifelong impact. By being aware of the basic principle that the riskier the investment, the higher the potential return, you will be able to make educated financial decisions.

4 Tips to help you choose your investment advisor: You want to find one who will give you the best possible advice – not someone just looking after their own interests, so make sure that they do not work on commission. You should be aware that certain financial professionals are experts in a particular service, but not in An accountant for example cannot also do your financial planning; you need a certified financial planner to do that. You should not rely entirely on one financial advisor, you need to build a collaborating team comprising of different types of expertise. Ensure that your financial experts welcome input from the other professionals in your financial team.

Types of investments

When you start investing, you may need to educate yourself on the different investment options available. To be able to choose amongst different investments you need to have some knowledge about the different investment categories and their characteristics. The most common types of investments are grouped into several general categories: ownership, lending, cash equivalents, funds and investments in the Crypto space.  We set below some basic information on all four groups of investments.

1. Ownership Investments

Ownership investments are considered the most volatile and profitable class of investment.  When you purchase an ownership investment or equity, as it is alternatively called, you own an asset or part of it. You expect the value of this asset to increase, thus giving you a return on your investment. The value of the asset is determined by fluctuations of its relevant market. Some examples of ownership investments are:

1. Stocks

When you own stock in a company, you partially own the company and have a right to a portion of the company’s value. For example, if you owned 10,000 shares of a company that has 1,000,000 outstanding shares, you would own 1% of that company.  You can profit by how the market values the asset you own. If the company makes a big profit, investors will want to own its shares, driving up demand for them and thus increasing their price. You can profit by selling your shares at a higher price than the price you bought them or by receiving dividends on the shares included in your investment portfolio.

1. Business ventures

Putting money in a new or existing business, is an ownership investment with potentially high returns. People such as Bill Gates of Microsoft and Elon Musk of Tesla have made huge personal fortunes by creating products and services and selling them to the market through their own businesses.

1. Real Estate

Buildings that you buy to rent out or repair and resell are considered ownership investments.  The latest financial crisis followed by the housing market crash is a good illustration of the risks associated with investing in real estate. The house you purchase to live in is not considered an investment, as it is not purchased with an expectation of profit.

1. Precious objects and collectibles

Precious metals and stones, art and collectibles, if bought with the intention to resell for profit, can all be considered ownership investments. There are risks associated with owning these investments since if you don’t take good care of them, they might be damaged and depreciate in value.

2. Lending Investments

Lending investments usually bear a lower risk than ownership investments and have lower returns as a result. If you choose to invest in a bond issued by a company, you will receive a set amount over a certain period, while if you choose to invest in a stock of the same company, you might get double or triple the money or lose all of it if it goes bankrupt.  In case of bankruptcy, bondholders usually still get their money and the stockholder often gets nothing.

1. Your savings account

The money you deposit in your savings accounts are essentially being lent to the bank, which loans it out to other people. The low return you get is associated with the minimum risk you have since deposits are protected up to a certain amount by authorities such as the FDIC in the USA.

1. Bonds

Bonds are basically debt obligations, a form of borrowing money. The issuer of the bonds receives money which has to repay over time, including periodic interest that has to be paid to the lender. The risks and returns will depend on the financial status of the issuer of the bond and type of bond, but overall, lending investments are considered lower risk and have a lower return than ownership investments.

3. Cash Equivalents

Cash equivalents are investments that can be readily converted into cash and are characterized as low-risk, low-return investments. There are different types of cash equivalents such as treasury bills, commercial paper, marketable securities, money market funds and short-term government bonds.

4. Funds

Mutual funds, index funds, and ETFs can help investors diversify their portfolios.

1. Mutual Funds

Mutual funds are funds operated and actively managed by an investment company. The money is pooled together from various shareholders and then invested in different stocks, bonds, options, commodities, or money market securities. Mutual fund managers buy and sell stocks on a regular basis and try to deliver returns that beat the overall market performance.

1. Index Funds

An index fund is a type of mutual fund whose portfolio is designed to track the components of a market index and can give investors increased diversification, broad market exposure, and low operating expense. Examples of indices that index funds mimic are: the S&P 500, the NASDAQ 100, the Wilshire 5000, and the Dow Jones. Index funds are not actively managed, they just mimic a particular market index and as a result they have lower costs.

1. ETFs

An ETF (exchange traded fund) is a security that tracks a basket of assets like a commodity, sector, index, or other area. It acts similarly to an index fund, but trades like a stock. Examples include S&P 500 ETFs — called “spiders” — and Wilshire 5000 ETFs — called “vipers”.

5. Crypto-assets & Blockchain

Crypto assets are digital assets which use public ledgers such as blockchain, which record, verify and secure transactions in code, establishing ownership.  There is a wide range of crypto assets which vary as per their characteristics and can therefore be utilized for different purposes. Crypto assets tend to operate independently, without the interference of a central bank or government authority. They can be considered autonomous in that sense. The most common form of crypto assets are cryptocurrencies, with currently more than 8,000 different cryptocurrencies in the market. You must all be familiar with their most widespread version, known as Bitcoin, which was the first cryptocurrency created. A cryptocurrency is a digital, encrypted and decentralized medium of exchange, used for the purchase of goods and services as well as a form of investment.

The stock market

The stock market is a market for trading the stock of companies and other financial securities and offers investors the opportunity to reap rewards, but there is also an associated risk. Although any investment carries risk, education, experience, and a trusted team can help you achieve successful returns on your investments.

The stocks of public companies are listed and traded on stock exchanges. The stock of U.S. companies can be listed on several different exchanges like the New York Stock Exchange (NYSE), NASDAQ, AMEX, etc.

During trading, stocks are bought and sold by bidding. When the bid price (price at which a buyer is willing to buy) and ask price (price at which a seller is willing to sell) match, a sale takes place. This means that prices can fluctuate day-to-day and the worth of the stock you own can change, depending on the demand for the company’s stock. The stock market moves based on prices at which people are offering to purchase a stock.

A stockbroker is usually the middleman in any transaction who sells or buys stock on your behalf. In addition, stockbrokers may also offer advice to their clients on which stocks to buy.

Street talk

Wall Street has its own ‘language’ and it is good to be aware of it so we set below a few of the most common terms:

• Share — A share is an ownership unit of a company issued to shareholders.
• IPO —Initial Public Offering (IPO) is the first sale of a corporation’s common shares to public investors. The main purpose of an IPO is to raise capital for the corporation.
• P/E Ratio —The price/earnings (P/E) ratio represents a stock’s present price in relation to its per share earnings from the past year.
• Moving Averages —Technical investors look at charts and evaluate the stock price in relation to the average of a stock’s closing price for a specified number of previous closing prices. This can indicate whether the stock is moving up or down – which is important for analysis because once a stock starts moving in a particular direction, it tends to gain strength and continue moving in that direction.
• Volume — equals the daily number of traded shares of a particular security. This is another indicator since increased volume on increasing prices shows accumulation; Increased volume on lower prices shows distribution. Price/volume relations can determine which way a stock will move.
• Consolidation —occurs when a stock pulls back after a move up or down, and temporarily trades in a narrower range on lower volume.
• Odd Lot — order to buy or sell less than 100 shares of a stock.
• Stop Loss —This is a sell order placed under the current stock price to limit losses in case a stock price goes down. For example, your stock is currently at US$20. You want to sell if it drops to US$18, so you would simply put a Stop Loss order in at US$18. The stock is sold automatically once it reaches that level.
• Bull Market – A period of generally rising share prices which encourages buying. The start of a bull market is marked by pessimism. The feeling of despondency though, changes to hope, optimism, and eventually euphoria, as the bull runs its course.
• Bear Market – A period where share prices are falling and where selling is encouraged. A bear market is typically shrouded in pessimism and the economy typically slows down.
• Market Correction – Corrections are generally temporary price declines, interrupting an uptrend in the stock market. A correction has a much shorter duration than a bear market.

The real estate market

Home ownership provides a number of benefits, but like all major purchases, buying property takes planning. First, you need to have a working budget in place so you know what you can truly afford. Financially successful people are the ones who make sure they can really afford a purchase before they buy. You have to take into account all the costs associated with buying property such as taxes, repairs, maintenance, unexpected damages and so on.

The benefits of property ownership.

• Leverage — As a property owner, you have the enviable ability to control a property of greater value than the cash you originally invested. You gain leverage by borrowing money, typically from a financial institution. For instance, say you purchase a property for €100,000. Most people get a loan for the majority of that amount. They may have €20,000 for a down payment, and then borrow the remaining 80% from a mortgage company. The €80,000 represents the loan amount and is referred to as the principal balance. Thus, you control a much larger asset as you pay down the 80% loan over time (mortgage payments).
• Equity Growth — Paying down the principal balance in regular increments gives you predictable, steady equity growth over time. Each time you make a mortgage payment you pay down a portion of the balance you owe.
• Tax Benefits — Real estate owners have many tax benefits available to them.
• Appreciation — Appreciation is a real estate term for the increase in value of land and buildings. If you purchase a house for €200,000, for example, and the property appreciates 10%, the value of the house is now €220,000. If it appreciates 10% again the next year, the value grows to €242,000.
• Higher Return on Investment Potential — Given the leverage real estate investment offers, and the fact that your investment appreciates on the total property value, your ROI is much higher than you would encounter with other investments.
• Cash Flow — Rental property owners generate cash flow via monthly income collected from

The risks of real estate investing.

• Liquidity — Selling a property can take years, depending on market conditions. When the market is strong, the average time to sell in most communities is two to six months. In bad market conditions, the property can be listed for years before it This means that if a need for cash arises, despite owning let’s say a $500,000 villa, it will not do you any good because you aren’t able to “access” that money; to convert them into cash.
• Change in Loan Market — Lenders can change their rules at any time. Changes in loan terms affect future buyers and your ability to sell the property.
• Market Conditions — Fluctuations in market conditions can quickly change your situation. It’s important for property owners to view the long-term market outlook, both nationally and in the local
• Maintenance— Repairs on a home can be quite costly. Be sure to have enough money saved and the right insurance so that you’re adequately prepared for This is the same logic as buying a car; it’s not enough to have the money to buy a Maserati, you also need the money to meet the costs that come with it.

Are real estate investments a good idea for athletes?

A very simple yet rewarding form of investment is investing in real estate. An athlete can buy and own real estate properties which can generate rental income and appreciate in value through time. Alternatively, athletes can invest in real estate without having to own, rent out or operate any property by investing in a real estate investment trust (REITs).

One of the main reasons which make investing in real estate a good fit for athletes and their profession, is that it allows them to receive a passive income without having to be involved with the management of the property. Further to that, the long term and low risk nature of real estate investment can fit an athlete’s plan to have a stable income after the end of their career. If an athlete has a different plan for their career after sports, the real estate in their possession can also act as leverage to raise funds to help turn any other of their goals into reality.

To truly appreciate the associated risks and benefits of real estate, one needs to be familiar with the pros and cons of the market. On the plus side, the real estate market, while not as profitable as other investment options, tends to be less volatile and risky compared to the stock market. Property owners are more likely to benefit from tax deductions and other such government- related benefits. Moreover, people with the ability to purchase multiple assets can count on a lucrative flow of cash upon which they can count for their main source of income – an ideal situation for athletes. Finally, in the long-run real estate assets are very likely to increase.

For instance, between 1990 and 2019, the increase in the S&P 500 was almost four times higher than the increase in real estate prices. Moreover, real estate assets are highly illiquid. That means that in the case of emergencies, the owner is unlikely to be able to raise funds swiftly by liquidating their assets. Also, something that investors and others tend to overlook, are the associated costs of owning real estate assets. Not even to mention the daunting task of dealing with tenants. You may have to deal with, leaks, repairs and overdue rent to name a few.

How athletes can benefit from the real estate market

Former US president (1933-1945) Franklin D. Roosevelt (FDR) said ‘real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world’. This statement is frequently recast and repackaged by people familiar with real estate.

How does it work?

FDR is probably right. Historically, real estate investments have proven to be the safest asset class and the reason is simple to understand. Regardless of how technology advances and how much certain industries, products and services become obsolete, less centralized or oversaturated, human beings will always require land to live in, work on, farm and so on. It is, in other words, a safe bet – to the extent that safe bets exist.

When it comes to how the market operates, there are essentially two routes: you either go solo or you become part of some sort of investment company; for example, real estate investment groups (REIGs) or real estate investment trusts (REITs).

To proceed with real estate investments, firstly, the prospective investor needs to decide what it is they want to do with their property. Are they going to rent it out for cash? Or are they going to sell when the price rises to a specific level (by looking at the Return on Investment)? In their extreme form, these investors are called “flippers”. Or maybe, athlete investors are thinking about life after sport as a real estate agent in which case they can make money (through commissions) by being the buffer between buyers and sellers. There are therefore, many ways in which someone can engage and profit from the real estate market both in the short and the long run.

Factors driving the market

The next thing we ought to look at are the factors that influence the real estate market as a whole – which is why location, location, location is not among them. Firstly, we have interest rates; when they are low, borrowing is easier and repayments are milder which means that conditions to take out a loan are favorable. Nonetheless, when interest rates are low then real estate prices are likely to go up due to the imminent rise in demand. People with sizable cash flow streams, which enable them to mostly fund the investment in cashs, might want to take advantage of the market when prices are low (and interest rates high) in order to cash in when prices rise. Of course, that also depends on the type of investor you are – selling versus renting out.

The Real Estate market tends to align with broader economic conditions; therefore, a second factor is the economy. By looking at standard economic indicators such as GDP and employment levels, an investor can relatively accurately assess the real estate market as well. The market is likely to follow both a sluggish and a booming economy. Demographics are also important. Population growth, migration levels and whether the population is ageing or not, are likely to influence the demand, supply and prices of the real estate market.

An often-overlooked factor are state practices and government policies. This is highly contingent upon location. For example, following the Great Recession, the US federal government gave several incentives to buyers and investors in an attempt to ignite the market. Other countries in the European Union have similar policies in place for first-time homebuyers for instance. Prospective investors need to be familiar with local legislation, incentives and subsidies when considering purchases in the said area/ city/ country.

In short, in order to get familiar with the real estate market you need to understand all the factors and ingredients that we described above. That is the first step to being able to participate in one of the planet’s oldest markets. That will equip you with the ability to do your own due diligence and research, should you decide that the world of real estate is for you.

Blockchain and crypto-assets

With numerous sports teams now accepting Bitcoin as a form of payment as well as professional athletes accepting it as part of their salary or sponsorship, crypto investment interest has increased significantly among the sports industry. The first team to accept Bitcoin were the Sacramento Kings, whilst the Dallas Mavericks accept Bitcoin as game tickets payment. Furthermore, crypto firms are steadily becoming major sponsors in the sports field with examples such as BitPay being an ESPN sponsor in 2014, and Cashbet being Arsenal Soccer Club’s official partner. Some of the most high-profile athletes are openly joining cryptocurrency sponsorships such as Tom Brady and Aaron Rodgers. Russel Okung, of the Carolina Panthers, is paid half of his salary in Bitcoin, whilst Kansas City Chief’s Sean Culkin chose to convert his entire salary to Bitcoin.

Cryptocurrency investment can bring about various benefits to investors, including the potential for high returns in addition to portfolio diversification, with some supporting that cryptocurrency can be an alternative to gold. For example, according to Bloomberg in 2021, the S&P 500 declined in 17 out of the 60 months till the end of December 2020, while the price of bitcoin rallied in seven, generating higher returns. Furthermore, advocates of cryptocurrency support that due to the lack of government interference, they offer protection from debased currencies and the threat of rising inflation since they are not subject to political and economic pressures the same way other currencies are. Finally, there is ever-growing acceptance of cryptos with an increasing number of crypto payment platforms, making their use more convenient over time.

Nonetheless, cryptocurrency investments come with certain risks as well. Their high volatility can create a large loss potential, counteracting the possibility of large gains– the timing of an investment in cryptocurrencies can have an important influence on the returns achieved. This volatility also makes them a poor store of value due to lack of stability. Also, keep in mind that not all cryptocurrencies are the same and therefore their performance may vary, with some doing better than others. Therefore, you need to make sure that you select the cryptocurrency you want to invest in wisely; reading the fine print, looking for an identifiable owner as well as looking into which other investors are investing in it, and whether the currency is already developed, among other things. Additionally, as a potential investor, you should consider the fact that cryptocurrencies are not subject to official oversight or regulation allowing for the potential of illegal activity taking place.

Based on the above, one could argue that high paid sports-stars with contracts worth hundreds of millions can risk losing a few million dollars in risky investments without having to change their lifestyle, but not everyone can take this risk; especially in such a fast-moving space. Therefore, athletes experimenting should do so cautiously. It is also worth mentioning, that FC Barcelona and Manchester City, have had to cancel crypto-related sponsorship deals after the legitimacy of those companies was questioned.

Another form of crypto assets available for investment, are utility tokens which provide access rights to future products or services, through financing of projects for start-ups, companies, or project developments. For example, an Uber token, could be used to pay for an Uber ride, but not for anything else, otherwise it would have to be exchanged against fiat (regular) money or a crypto-coin. Therefore, the utility token’s investment value is linked to the actual demand for the utility token. On the other hand, security tokens represent ownership shares in a company whose business operates with blockchain technology. Their value correlates to an external, tradable asset. They come with a stake in the project as well as benefits, such as voting rights, profit sharing or dividends. It should be highlighted, that security tokens are highly influenced by the price of the underlying asset. For example, if the valuation of the company increases it is likely that the price of the related security token will increase as well.

A relatively new, rapidly evolving type of crypto asset which has experienced a surge in popularity, are Non-fungible Tokens (NFTs). NFTs are one-of-a-kind non-interchangeable units of data stored on a blockchain, with the purpose of ownership of a unique tangible or intangible digital file, which usually includes songs, digital images, videos, designer clothing, etc. In 2021, an NFT in the form of art work, an electronic record equivalent to an image, called Everydays: The First 5000 Days, was sold for almost $70 million at Christie’s Auction House. Since then, NFTs have gained a lot of attention by numerous celebrities, including NBA superstar Stephen Curry. NFTs have seen weekly sales of hundreds of millions of dollars being recorded, through public marketplaces, as well as custom-built applications like NBA Top Shot. NFTs can also be considered as a form of membership, in addition to being an investment, providing access to events, as well as allowing the holder to engage and interact with other NFT holders, forming part of an exclusive group.

However, one should bear in mind that with crypto market volatility which can significantly affect NFT demand, and incomplete regulatory framework, investment in NFTs should be done carefully, as with all other forms of crypto assets. As a rule of thumb, a new investor could decide what percentage of their portfolio they would be willing to lose if the investment went wrong? So, is it worth the risk after all?

Investment diversification- Do not put all your eggs in one basket!

What would happen if you had all your money in real estate and the real estate market collapsed?  Sounds familiar right?  During the Great Recession of 2008 in the U.S. this is exactly what happened with real estate values going down by a staggering 30% plus!

Most top investment advisors will recommend that you diversify your investments to protect you from losing everything. Diversification means that you put your money into several different types of investments that are unlikely to all move in the same direction. For example, you might spread your money across stocks, bonds, and real estate. When the value of one investment goes down, one of the others might go up, so you either have better returns or reduce your overall losses.  Furthermore, by diversifying your portfolio, you remove any form of idiosyncratic risk which is the risk associated with a single stock.  For example, if you hold a single stock of let’s say Tesla, you bear the risk of the Tesla stock price falling.  When, on the other hand you own 100 different stocks, including Tesla, the risk that you bear when the Tesla stock price falls is negligible given that you have 99 more stocks in your portfolio of investments.

Diversification can be an important step towards developing a successful investment formula and a winning portfolio. Your team of investment advisors can help you make qualified diversification decisions. You should consult with them about how best to spread your money around to reach your long- term goals.  In his book “Unshakeable”, Tony Robbins talks about four different types of diversification:

• Diversification BETWEEN different asset classes; i.e. real estate and shares. When you allocate assets into different asset classes such as shares, real estate, cash, bonds, etc. you balance risk and potential rewards.
• Diversification WITHIN an asset. For example, real estate can be diversified between owning residential and business properties or, investments in shares can be diversified between large established companies and small start-ups.
• Diversification ACROSS industries, countries and currencies around the world. When you allocate your shares portfolio across different industry sectors you will be able to monitor and balance the impact of each industry sector on your portfolio.  Also, spreading your equities across different countries and currencies, contributes to risk balancing and potential maximization of returns.
• Diversification ACROSS time; just keep adding to your investments systematically over the years and you will increase your returns while reducing your risk. This is called Dollar Cost Averaging and it is an investment technique through which you buy a fixed dollar amount of a particular share on a regular basis, regardless of the share price.  The goal of this method is to reduce the impact of volatility on large purchases of shares and protect the investor against market fluctuations.

There is no generic diversification model which can be a perfect fit for every investor.  Each investor has different characteristics which should be considered when forming a diversification strategy.  These characteristics include the investor’s financial goals, time horizon, risk tolerance, investment expertise, need for liquidity, etc. For example, a mature athlete’s investment horizon may be 5 or 10 years whereas a rookie athlete’s time horizon may be 20 or 30 years.  Also, a mature athlete is naturally less of a risk taker given that their investment time horizon is limited.  So, diversification is not a one-fit-for-all strategy, nor a one-time task.  A proper diversification strategy should always align with your particular circumstances and characteristics; it should be continuously monitored and periodically adapted to make sure that it continues to make sense.

So, remember:  A proper and flexible diversification strategy, periodically adapted to your changing needs, is the key to building a successful investment portfolio and ultimately achieving your financial goals.

Real Life Examples (5-minute discussion) Venus Williams—sister of Serena Williams—is one of the most accomplished tennis players of all time. She has also managed to build a diversified investment portfolio that includes: EleVen- a woman’s clothing line V-Starr interiors- interior designers’ company Ellevest- digital investment platform Invested in UFC Along with her sister Serena, became limited partners in the Miami Dolphins Investment in Real Estate Result: In 2001, Williams was named one of the 30 most powerful women in America by the Ladies Home Journal. In June 2009, Williams was named 77th in the Top 100 Most Powerful Celebrities compiled by Forbes magazine. That same year, the sisters became the first African-American women to obtain ownership in an NFL franchise. What do you think about Venus’ investment choices?

Being investment prepared:  Go through the investment checklist!

Through investing, you are getting your money to generate more money and over the long term, you benefit from potentially higher returns than you get from a savings account. With a proper investment strategy, which you can set up with the help of a financial advisor, you can use your money to build up your assets and use them toward the major financial goals you have set, such as buying your dream home, buying your dream car, starting your own business, or having a financially comfortable retirement.

Investing is not simple and requires investors to be constantly educated and informed on the variety and complexity of investment vehicles available. If you choose for example to invest your savings in the financial markets, you have the opportunity to benefit when companies perform well or if you choose to buy and sell real estate you can benefit from their increase in value. The investment opportunities are almost endless.

To figure out if you are ‘investment ready’ we suggest you go through the following checklist which will give you an indication regarding your readiness to become a first-time investor.

• Before you consider investing, be sure to have 12 months’ worth of expenses put away in your emergency
• Be free of credit card debt and have a working budget in place that allows you to save money each
• Only use risk capital for investments. Risk capital refers to money that you can afford to lose without putting you in dangerous financial
• Have a team of trusted advisors and mentors at your
• Gain knowledge on the types of investments you are considering by conducting due diligence
• Determine the risk and potential reward. All investments have a certain amount of risk and reward. Ideally, you want to earn the highest return with the least amount of
• Have an exit plan in place in case the investment doesn’t go as

How should your income affect your investment choices

The incomes of athletes come in different shapes and sizes depending on their sport, location and the said athlete’s talent and skills. As a result, not everyone can afford to buy shares of Liverpool F.C like LeBron James, or set up their own whisky distillery. Most people have conjured up this image of how investing will instantaneously and effortlessly make you a millionaire; in most cases this is an illusion. There are those moments that being in the right place at the right time – such as investing in Apple in the early 1990s – will change your fortunes for good, but these instances are the exception, not the rule.

Investing is more about making an informed guess on where to place your money in order to try and set up for yourself a steady flow of income and guard your money against inflation. Some choices are safer than others, but there is no such thing as a completely safe and secure investment. For anyone trying to achieve financial freedom, their income is the most important weapon they have in their arsenal.

Your income (prize money plus any other source of revenue) defines your options. You should start by investing safely in order to build up your wealth, which will most likely take some time. The relationship between your income and investment choices is a vital one and therefore, you need to work out how to allocate your income by understanding that a) it is not infinite b) money for investment come after savings c) you need to set goals with a timeframe.

If your income is not properly utilized or is entangled in debt repayments, then your hands are basically tied. Assuming that you start with a basic prize income and no assets, you first need to organize your income appropriately. For example, apart from your primary bank account you can open additional accounts—the first being an investment fund where a fixed percentage of your income is transferred to. The second, an emergency fund since you never know what twist of fate is lurking around the corner.

Then, you need to decide what proportion of your income you wish to set aside for investments – usually something like 15% at first should suffice. As far as options are concerned, there are numerous out there as we have already discussed: index funds, mutual funds, single stocks, fixed annuities, real estate, real estate investment trusts, bonds, and so on. You have to do your own research and/or consult a professional and it would be better to focus on what you understand and believe in the most; after all it’s your money. However, make sure you never put all your eggs in one basket. Spread your investments in order to spread the risk as well.

Another important aspect of the equation is to set goals. If you just invest in cryptocurrency because everyone is, without a specific goal such as: ‘I will cash out once my return reaches $15,000’, then it is likely that you will never cash out because you will always go for more and in the end, you might even lose your initial capital. The best strategy is to set specific goals and even define them as short-term, medium-term and long-term. This way you pinpoint the exact moment that you will cash out (provided your investment proves profitable).

Structuring wealth in view of retirement from sport

Financial planning and wealth management should be at the core of an athlete’s mind throughout their career. The average athlete has a career of about 10 years, depending on their sport, and assuming they’re not forced to involuntarily retire. This suggests that while you’re an athlete, you need to plan your wealth in a way that you’ll be able to continue living a comfortable lifestyle for the next 30-40 years. It’s not as hard as it may sound, assuming you have a plan that will enable you to take the right actions, at the right time, in order to be financially covered for the rest of your life.

Establishing the Plan

At the very early stages of your career, it’s important that you sit down with a competent financial advisor and set the parameters that will shape your sports retirement fund. The most important information that you need to form such a plan is the number of years you expect to be earning the income of an athlete. Once you estimate that, you will essentially know that for the next ten years, for example, you will need to generate income or invest your money so as to grant you financial freedom for the rest of your life. Together with your advisor, you will set up a retirement fund which will consist of both savings for retirement as well as long-term investments that will be generating constant income for the rest of your life. It would be wrong to say that there is a fixed percentage that needs to go towards savings or investments because every athlete’s career and needs are very different.

Nevertheless, when you sit down with your financial advisor and share all the information regarding the expected timespan of your career, the value of your sporting contracts and your future plans, they can help you tailor a plan towards achieving a financially successful retirement.

Executing the Plan

Once you’ve established your plan of action together with your financial advisor, it’s up to you, the athlete, to faithfully follow that plan. Usually, young athletes tend to believe that money will never be a problem just because they’re easy to get at that point in their life. Good news is: professional athletes tend to make more money than the average worker throughout their career, but the money is more concentrated and it’s up to the athlete to spread them out throughout their lives. This is what makes the execution of the plan highly important. Every time athletes ignore the plan and spend excessively without accounting for retirement, they are essentially stealing from their future self and family.

Plan B and involuntary retirement

As mentioned above, athletes, based on their sport, have a certain number of years during which they will generate income for the rest of their lives. What happens though when you find yourself forced to retire earlier than planned due to the circumstances? Put simply, what if you have a serious injury half-way into your career that prevents you from playing? What happens to your retirement plan? Indeed, things can get more complicated in the case of involuntary retirement but yet again, with the right precautions, an athlete can survive and still have enough money to restructure their lives and switch to other career paths.

A simple precaution that an athlete could take is to create a ‘Plan B Fund’ where the athlete will save the amount required to pursue a specific college degree or start a business idea. By having the capital to invest in your education or in the opening of any other business, you already have an exit strategy towards another career. Of course, this by no means is an ideal path but as an athlete, given the nature of your professional career and your assets, you should always have a plan B in the case of involuntary retirement.

The circumstances and characteristics of your life as an athlete necessitate that you start structuring your wealth during the early days of your sports career.  Your post-sports life will be greatly affected, either positively or negatively, by the manner you have dealt with the wealth accumulated during your sports career.  It is extremely important to remember that proper financial planning helps you design your financial future. The earlier you start, the better off you will be!

Action Steps – Exercise 5 (20 minutes)

Complete the following quiz to test what you took away from today’s lesson.

1. Although financial freedom can have different meanings, a standard definition would be:

1. 1. A millionaire who has invested in multiple industries
   2. You have readily-available cash. In other words, you have highly liquid assets
   3. You are able to have the lifestyle you want, knowing you can afford it financially, without worrying about making ends meet
   4. You are free from financial obligations altogether

2. A positive indirect effect of investing is:

1. 1. You are protected by a rise in interest rates
   2. You will definitely earn high returns on your investment
   3. You are protected by a drop in interest rates
   4. You don’t have to worry about taxes

3. Passive Income is earned through work, while Active Income is earned without your work effort

1. 1. True
   2. False

4. Which of the following statements is false in relation to investing?

1. 1. Important to financial success is following a consistent, long-term investment plan
   2. You should have your emotions in check
   3. You should always invest in the stock market

5. In short, a Ponzi scheme is an investment fraud where people invest and the return on the investment is paid from the money of new investors

1. True
2. False

6. Which of the following is NOT a risk associated with investing?

1. Interest rate risk
2. Credit risk
3. Roaming risk
4. Liquidity risk

7. Which of the following should NOT be among your primary concerns when evaluating an investment?

1. The pros and cons associated with the investment
2. Your budget
3. Your goals (short-term and long-term)
4. Your friends’ recommendations

8. If you manage to get a good financial advisor then you should delegate everything to them.

1. True
2. False

9. If a company that you have invested in, increases its profit then that means that your stocks will increase in value because their demand will rise (as a result of rising profits)

1. True
2. False

10. What are mutual funds?

1. Type of prenuptial agreement
2. Business fraternities
3. Funds operated and actively managed by an investment company
4. Type of stock

11. The stock market could be defined as a market for trading the stock of companies and other financial securities

1. True
2. False

12. Which of the following is a benefit associated with property ownership?

1. Liquidity
2. Maintenance
3. Tax benefits
4. Changes in loan market

13. Diversification can take different forms. Choose all that apply

1. Diversification between different asset classes
2. Diversification within an asset
3. Diversification across cities
4. Diversification across time

14. Adaptability is key to diversification

1. True
2. False

15. Choose all that are part of the Investment Checklist:

1. Have an exit plan in place
2. Only use risk capital for investment
3. Have an emergency fund of at least 36-months’ worth of expenses available
4. You should always have your lucky charm with you

Answer sheet:

1.  c	6.  c	11.a
2.  c	7.  d	12. c
3.  b	8.  b	13. a,b,d
4.   c	9.  a	14. a
5. a	10.c	15. a,b

Lesson wrap-up

In this lesson we have covered the basics of investing so as to give athletes the necessary knowledge to make sound investment decisions.  We have explained concepts such as diversification of investments, the relationship between risk and investment potential and we have also presented various investment options along with their pros and cons.  We believe that this lesson has given athletes a comprehensive overview of how investments work and how they can get prepared to start investing.

At this point, we will wrap-up today’s lesson.  First, we will go over the learning objectives of this lesson and we want your feedback as to whether they have been achieved, and then we will address any questions you may have.  Please feel free to ask anything you’d like in relation to today’s lecture and we would love to hear how the concepts we discussed today relate to you and your greater life plan.